Cigar Flipping Discussion (moved from La Escepcion Thread)

[Habano]

True. They'll probably go to $700 a box in a year or two (just my guess). I'm going to sample one this weekend.

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Probably sooner than that. Someone in this thread who's already received boxes and posted pictures has been selling them for $600 a box.

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[Lotusguy]

Yeah doubt I'll be selling any of my 13.5 boxes I've got left. One of my top cigars and regionals.

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When certain cigars hit crazy pricing, I'm a seller... always other good stuff to have instead for less money. This one, however, I just had to keep after I smoked one from my open box.

[Lotusguy]

Probably sooner than that. Someone in this thread who's already received boxes and posted pictures has been selling them for $600 a box.

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Yup. Always flipping the rare stuff....

[shlomo]

Probably sooner than that. Someone in this thread who's already received boxes and posted pictures has been selling them for $600 a box.

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Thats pretty shitty.

[DoubleDD]

They are that much at secondary vendors as well. Capitalism. I paid that to get guaranteed boxes and have no regrets. These are better than the SFs in my opinion.

[CanuckSARTech]

Thats pretty shitty.

Why is it always same old, same old?

What's wrong with someone obtaining and then flipping a box for a resale point if they want, and if there is a market for it? What's wrong with someone making a buck?

[MPS]

Why is it always same old, same old?

What's wrong with someone obtaining and then flipping a box for a resale point if they want, and if there is a market for it? What's wrong with someone making a buck?

Don't you know? Only licensed vendors can make money on cigars! If you smoke cigars you are required to call any other person who smokes cigars "brother" and sell to them at your exact cost!

Now you know.

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[squizz]

Supply and demand. If you think the mark up on cigars is bad, don't even think about bourbon. Phew.

[Puros Y Vino]

Why is it always same old, same old?

What's wrong with someone obtaining and then flipping a box for a resale point if they want, and if there is a market for it? What's wrong with someone making a buck?

Don't you know? Only licensed vendors can make money on cigars! If you smoke cigars you are required to call any other person who smokes cigars "brother" and sell to them at your exact cost!

Now you know.

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Everyone is entitled to do with their property what they want of course. In this hobby though, some see it as poor taste to profit off of something that was newly released. On the flip side, it's also naive to expect someone to relay something to you at cost just as much. Who's wrong or right? Dunno. If a seller adds a little profit and someone meets that price I'd say both are happy with the deal. Sure, it sucks but it happens.

Between this release, the RA898's and the surprise Diplo Cuban RE, people are scrambling for favours. Some are offering at cost, others not. If like minded people connect, there's a chance for business. If you don't like someones price, don't pay it and don't be pissed at who does. Some cigars are just harder to source and sometimes that price boost in an indicator of the extra time or effort needed to acquire them.

You get to know over time who buys for the joy of it and who buys to flip. Figure that out for yourself and you'll be much happier.

[dangolf18]

If it were like bourbon, you'd be paying $2-3k for a box.

[CanuckSARTech]

Don't you know? Only licensed vendors can make money on cigars! If you smoke cigars you are required to call any other person who smokes cigars "brother" and sell to them at your exact cost!

Now you know.

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Everyone is entitled to do with their property what they want of course. In this hobby though, some see it as poor taste to profit off of something that was newly released. On the flip side, it's also naive to expect someone to relay something to you at cost just as much. Who's wrong or right? Dunno. If a seller adds a little profit and someone meets that price I'd say both are happy with the deal. Sure, it sucks but it happens.

Between this release, the RA898's and the surprise Diplo Cuban RE, people are scrambling for favours. Some are offering at cost, others not. If like minded people connect, there's a chance for business. If you don't like someones price, don't pay it and don't be pissed at who does. Some cigars are just harder to source and sometimes that price boost in an indicator of the extra time or effort needed to acquire them.

You get to know over time who buys for the joy of it and who buys to flip. Figure that out for yourself and you'll be much happier.

Agreed and noted on both thoughts.

The sentiment I was more meaning to point out was part of what Frank said - "If you don't like someones price, don't pay it and don't be pissed at who does."

Its the I-can't-have-it crowd or the I-choose-not-to-pay-those-exorbitant-prices crowd that then rains on everyone's parade that frustrate me, that's all. Proverbial wet blankets.

[Fugu]

Agreed and noted on both thoughts.

The sentiment I was more meaning to point out was part of what Frank said - "If you don't like someones price, don't pay it and don't be pissed at who does."

Its the I-can't-have-it crowd or the I-choose-not-to-pay-those-exorbitant-prices crowd that then rains on everyone's parade that frustrate me, that's all. Proverbial wet blankets.

Strange sentiment indeed, which I always miss to comprehend.

Millennia-long standing basics of trade: Don’t like it, don’t pay/don’t trade. Why at all should this code not apply to cigars? Sure, I may consider offering a special price to friends or for other sympathetic reasons, but still, same basic rules apply, and not only to cigars of course.

I’d even say, the “profit” of a successful negotiation certainly is mutual: The seller making some extra coin (whether it is a true profit remains to be shown, as it depends on his overall costs, which are easily estimated wrongly), the buyer receiving a commodity, which he obviously wasn’t able to acquire in the first place, had no access to cheaper sources, or had no alternative access at all. He has to decide, which markup it would be worth him. Nothing simpler to understand as that.

[shlomo]

Thats shitty

[maverickdrinker]

cigars, like anything, are nice to have, vs. need to haves. There will always be a market to flip at higher prices as long as there are buyers.

Happens in every type of market: alcohol, sneakers, guitars, etc. The internet has only increased the ability to find information and thus, lead to higher prices if not bought on retail when available.

Captialism at its finest and will continue to occur, regardless of people's opinions. Does it suck? yes, if you have to pay the secondary market price. Is this the reality? Yes, if you have to pay secondary market prices.

[wabashcr]

I have no issue with people marking up boxes they've aged and cared for, or even throwing a little extra into a sale price to cover your time or efforts. And of course nobody expects someone to sell something they paid a premium for at a loss. But buying boxes for the sole purpose of flipping them for profit seems wrong to me. Not illegal wrong or anything worth crying over, but the kind of wrong where I think that's probably not a person I'd ever care to associate with. You're not adding any value to the product. You're just taking advantage of an imperfection in a free market. No different than a ticket scalper. If your justification for doing something is that it's legal, or supply/demand, that's fine. But it ignores moral and ethical standards, and does so for an obvious reason.

[Mr. Japan]

If you sell cigars and make profit you should pay tax on it.

[perkinke]

The only real draw back for me is that this kind of secondary market sometimes causes manufacturers to overestimate the demand for a product and then sacrifice quality for quantity across the lines (some say this happening with bourbon, but I have only seen it in the trendy stuff that is already overrated). I say let folks chase these to the ends of the earth and pay through the nose, leaves more regular production for me.

[NSXCIGAR]

I have no issue with people marking up boxes they've aged and cared for, or even throwing a little extra into a sale price to cover your time or efforts. And of course nobody expects someone to sell something they paid a premium for at a loss. But buying boxes for the sole purpose of flipping them for profit seems wrong to me. Not illegal wrong or anything worth crying over, but the kind of wrong where I think that's probably not a person I'd ever care to associate with. You're not adding any value to the product. You're just taking advantage of an imperfection in a free market. No different than a ticket scalper. If your justification for doing something is that it's legal, or supply/demand, that's fine. But it ignores moral and ethical standards, and does so for an obvious reason.

This isn't an imperfection in the free market, it is the free market. Individuals freely exchanging goods & services any way they see fit at any price they settle on. If the transaction is voluntary, value and wealth are created for all involved parties. All sorts of goods are bought with the sole intention of "flipping" them world-wide and economy-wide. It's called wholesaling. There is no fundamental or logical difference between any retailer buying from a manufacturer and a buyer of cigars re-selling them to us.

From an economic standpoint the root problem is HSA's failure to adjust prices at the LCDHs to better reflect actual demand. Who cares who's "making a profit", whether it be a a secondary market re-seller or HSA? HSA could have just as easily charged more at the LCDHs and we wouldn't be having this conversation, and nobody outside of Italy would be able to acquire these cigars at all.

Prices serve a purpose. They allow resources and products to be allocated towards their highest and best uses. If secondary sellers didn't exist these boxes might have sat on shelves in Italy for years with few people able to physically get there to buy them. We should thank the secondary sellers for offering these to us at higher prices since without them we couldn't have them at any price.

[NSXCIGAR]

Being new, not in the know and from the US, how does one go about getting regional releases/limited editions? Do you pretty much have to know someone from and LCDH or travel to that country? If people don't want to put their recommendations on display, feel free to message me. I'd just like to know some strategies going forward on the releases. Everything I've read in this cigar says I'm missing out and I'd like to avoid that in the future!

Many countries/regions sell online and/or are willing to ship worldwide. In this case, Diadema (Italian Habanos distributor) is only distributing their REs to Italian LCDHs who do not sell online or ship worldwide. Italian regional releases are among the most difficult to obtain because of this. Also, prices are set by HSA which may or may not accurately reflect actual demand. This is the case here with La Escepcion.

Ability to acquire REs is mostly dependent on the region in question and their distributor. That's why Asia Pacific, UK and Swiss releases are typically the easiest to come by--they're the leaders in online/wordwide sales. Also, their distributors don't limit the distribution exclusively to LCDHs like some others do.

The bottom line is, in countries like Italy you need to have a contact there who can purchase in person from an LCDH and coordinate distribution privately. And as we're discussing here in this thread, that can be costly.

[wabashcr]

This isn't an imperfection in the free market, it is the free market. Individuals freely exchanging goods & services any way they see fit at any price they settle on. If the transaction is voluntary, value and wealth are created for all involved parties. All sorts of goods are bought with the sole intention of "flipping" them world-wide and economy-wide. It's called wholesaling. There is no fundamental or logical difference between any retailer buying from a manufacturer and a buyer of cigars and re-selling them to us.

From an economic standpoint the root problem is HSA's failure to adjust prices at the LCDHs to better reflect actual demand. Who cares who's "making a profit", whether it be a a secondary market re-seller or HSA? HSA could have just as easily charged more at the LCDHs and we wouldn't be having this conversation, and nobody outside of Italy would be able to acquire these cigars at all.

Prices serve a purpose. They allow resources and products to be allocated towards their highest and best uses. If secondary sellers didn't exist these boxes might have sat on shelves in Italy for years with few people able to physically get there to buy them? We should thank the secondary sellers for offering these to us at higher prices since without them we couldn't have them at any price.

The imperfection in the free market is as you described in your last paragraph. In a truly free market, buyers and sellers are not restricted by geography, laws, or any other access restraints. In a truly free market, everyone would have access to the retailers.

There are quite a few fundamental differences between wholesalers, retailers, and people flipping product. The former pay for their access, usually through distribution agreements and contracts. They provide a service to the manufacturers by committing to share liability and selling to end users. They add value, and deserve to be compensated. Flippers pick and choose where they see opportunities for profit, with little risk/liability or added value.

[NSXCIGAR]

The imperfection in the free market is as you described in your last paragraph. In a truly free market, buyers and sellers are not restricted by geography, laws, or any other access restraints. In a truly free market, everyone would have access to the retailers.

There are quite a few fundamental differences between wholesalers, retailers, and people flipping product. The former pay for their access, usually through distribution agreements and contracts. They provide a service to the manufacturers by committing to share liability and selling to end users. They add value, and deserve to be compensated. Flippers pick and choose where they see opportunities for profit, with little risk/liability or added value.

A free market has nothing to do with geographical restraints. We're all restrained by geography as we can't be in two places at once. A free market, again, is simply an environment where people can exchange--or choose not to exchange--freely and voluntarily. Discrimination is an inherent part of voluntary exchange. I can choose to sell to you and not him. Again, voluntary. Hence signs that read "we reserve the right to refuse service to anyone."

The existence of formal contracts is secondary to exchanging. Parties may choose to modify terms and address liability as they see fit, but it is not necessary and does not alter the fundamental process of exchanging goods at a certain price with the intention of re-selling them, or not. The principles are identical whether you're Wal-Mart or some guy at a swap meet.

Again, the re-sale, or any sale of a product in a voluntary environment necessarily creates value for all involved parties, as all voluntary transactions do. All of them. This is an axiomatic economic law and isn't debatable. Are the re-sellers not creating value for HSA by moving products that otherwise would sit on shelves for years? And are they not creating value by allowing us to purchase them without having to set foot in Italy?

If someone could please explain to me how, without these re-sellers, these cigars would move off the LCDH shelves and into our hands at all I'd be all ears. What good is a low price if no one can get access to it? That's what happened in the Soviet Union. Prices were always low but nothing was on the shelves. If something was wanted, people turned to the black market where people could buy and sell freely, at any price.

[wabashcr]

A free market has nothing to do with geographical restraints. We're all restrained by geography as we can't be in two places at once. A free market, again, is simply an environment where people can exchange--or choose not to exchange--freely and voluntarily. Discrimination is an inherent part of voluntary exchange. I can choose to sell to you and not him. Again, voluntary. Hence signs that read "we reserve the right to refuse service to anyone."

The existence of formal contracts is secondary to exchanging. Parties may choose to modify terms and address liability as they see fit, but it is not necessary and does not alter the fundamental process of exchanging goods at a certain price with the intention of re-selling them, or not. The principles are identical whether you're Wal-Mart or some guy at a swap meet.

Again, the re-sale, or any sale of a product in a voluntary environment necessarily creates value for all involved parties, as all voluntary transactions do. All of them. This is an axiomatic economic law and isn't debatable. Are the re-sellers not creating value for HSA by moving products that otherwise would sit on shelves for years? And are they not creating value by allowing us to purchase them without having to set foot in Italy?

If someone could please explain to me how, without these re-sellers how these cigars would move off the LCDH shelves and into our hands at all I'd be all ears. What good is a low price if no one can get access to it? That's what happened in the Soviet Union. Prices were always low but nothing was on the shelves. If something was wanted, people turned to the black market where people could buy and sell freely, at any price.

Geography or other constraints that act as a barrier to entry have everything to do with whether or not a market is truly free. Don't you think the retailers in Italy would like to be able to sell to buyers overseas? There are artificial barriers preventing the retailers and potential buyers from freely interacting. That's a pretty important aspect of a free market.

If there's a cost associated with getting these cigars out of Italy, then of course that cost should be passed on to the consumer. I'm not particularly interested in this cigar, so I don't know what would be considered reasonable. Plenty of people are selling them on the secondary market, so it can't be too difficult. My comments about flipping are not specific to this cigar, but more general regarding what I've personally seen. I see it a lot more with NCs, especially limited releases. People who have early or special access will hoard things that would have no difficulty selling otherwise. I realize that may not accurately describe the situation with this Italian RE. But it's really not an argument about the economics of it. Just because it's legal, or people are willing to pay, doesn't mean it's ethical.

I obviously don't care for the practice of flipping. I've had plenty of opportunities to flip things, and it just isn't for me. I also don't call people out for it, or whine and cry about others who choose to do it. I'll gladly share my thoughts in a discussion, as is the case here.

[CanuckSARTech]

I have no issue with people marking up boxes they've aged and cared for, or even throwing a little extra into a sale price to cover your time or efforts. And of course nobody expects someone to sell something they paid a premium for at a loss. But buying boxes for the sole purpose of flipping them for profit seems wrong to me. Not illegal wrong or anything worth crying over, but the kind of wrong where I think that's probably not a person I'd ever care to associate with. You're not adding any value to the product. You're just taking advantage of an imperfection in a free market. No different than a ticket scalper. If your justification for doing something is that it's legal, or supply/demand, that's fine. But it ignores moral and ethical standards, and does so for an obvious reason.

It's not an imperfection. It's the RESULT of a free market, when dealing with communist corporations and such.

It's CIGARS - let's not get into moral and ethical standards. People that ***** about one thing, likely advocate other things. Don't whine about the upsale on a commodity product, but then privately be okay with something else (not you, just an example. Say, like speeding, or cheating on a professional exam, etc.)

Huge difference there. Ticket scalping, in many locales and contexts, is illegal. Selling cigars isn't...

If you sell cigars and make profit you should pay tax on it.

Granted, provided you don't flub out on taxes.

That said, I and many others have bought cigars, tax free, and/or had them shipped in, and failed to "voluntarily self-report and self-pay" the applicable taxes. (All here raise your hands those that haven't done that?) But very much agreed, if you're doing it SO MUCH that it needs to and/or should be reported to the Tax Man as a secondary source of income, then granted, you should be doing that - fully agreed.

And the day that I myself resell cigars to such a level as is required by law, and/or to a higher amount than I got even a birthday present for, then I'll gladly do that. Hell, if I had the time or care that much for any resale stuff, and could FATHOM getting into the tax-reporting avenue as it's a secondary source of income, I'd gladly do that.

And, for what it's worth...

While I don't resell cigars, but I do resell Cuban licence plates, Hotel Nacional ashtrays, etc....

I do so on eBay. Ebay has a thing for Canadian sellers (not sure about other countries or whatnot) - if you get into the tax-income reporting target-zone, they notify you, and you/they send a report to Revenue Canada to better assist with tax completion come that time. Only had it happen once, but it was no big deal.

[NSXCIGAR]

Geography or other constraints that act as a barrier to entry have everything to do with whether or not a market is truly free. Don't you think the retailers in Italy would like to be able to sell to buyers overseas? There are artificial barriers preventing the retailers and potential buyers from freely interacting. That's a pretty important aspect of a free market.

If there's a cost associated with getting these cigars out of Italy, then of course that cost should be passed on to the consumer. I'm not particularly interested in this cigar, so I don't know what would be considered reasonable. Plenty of people are selling them on the secondary market, so it can't be too difficult. My comments about flipping are not specific to this cigar, but more general regarding what I've personally seen. I see it a lot more with NCs, especially limited releases. People who have early or special access will hoard things that would have no difficulty selling otherwise. I realize that may not accurately describe the situation with this Italian RE. But it's really not an argument about the economics of it. Just because it's legal, or people are willing to pay, doesn't mean it's ethical.

I obviously don't care for the practice of flipping. I've had plenty of opportunities to flip things, and it just isn't for me. I also don't call people out for it, or whine and cry about others who choose to do it. I'll gladly share my thoughts in a discussion, as is the case here.

The existence of these artificial barriers are not the free market. Anything that stands in the way of free exchange isn't the free market. In fact, it's the opposite. I think our definitions may be different here. I do think you're confused on the geography issue, however. Geography has nothing to do with the process of voluntary exchange. It's simply an additional factor to contend with for all parties in the decision-making process of exchange.

As far as ethical, disregarding all that's occurred prior to the point of exchange (which can certainly be important and have ethical implications), no voluntary exchange in and of itself can be exploitative. That has been understood since the time of Adam Smith.

If unethical or non-free market factors have resulted in unfavorable conditions at the point of sale, blame the prior conditions--not the final seller of the good.

Free market economics teaches that the concept of price-gouging is actually a pretty baseless idea. As long as there are no special privileges or laws favoring certain parties in play price-gouging as a concept just has no validity and certainly no ethical implications. The only way to counter so-called price-gouging are price controls, and as the Soviets, et al. discovered that brings with it a host of other issues.

[Fugu]

We should thank the secondary sellers for offering these to us at higher prices since without them we couldn't have them at any price.

Seems someone learned his economics lessons...

Indeed, I think that is the key sentence. That’s the important part. It is too easily overlooked by people that there is of course a value added by the second seller to the purchaser: It is accessibility of otherwise - to him - inaccessible goods. Be it a new RE or rare vintage stuff. If it were easily accessible to the buyer, he could have purchased it by himself at release price. But he didn’t. There will be a reason why he didn’t: Geographic restrictions – no one to blame for that, he found out three years after release that he indeed liked the 1966 much more than he initially thought, or he simply wasn’t born at the time a Davidoff Ch. Margaux was still in production. And there is a price to it. Therefore, in a voluntary negotiation with a secondary market provider (I will avoid the expression ‘flipper’), it is to the benefit of both parties. If it weren’t so, the transaction simply would not materialize.

That being said, granted, there is always the possibility of overreaching. And there then finally also comes an ethical component into play that cannot be dismissed. But again that relates to all kind of business.